Online retailers call Internet sales tax a ‘nightmare’ – Yahoo! Finance.
Kevin Hickey’s company outside Pittsburgh, Online Stores, sells everything from flags to English tea to construction equipment. It’s one of those do-everything retailers that essentially serves as an online wholesaler, competing with similar firms all over the world.
That means its profit margin is practically nonexistent. It has annual revenues of $30 million and might clear $400,000 in profit this year.
“We’ve got a huge, additional compliance nightmare that we’ve got to deal with,” Hickey said. “In fact, we’ll be charging more, so we’ll lose revenue and have higher costs.”
His greatest fear is being subject to another tax audit, like one he went through in 2006. State officials found that he should have been paying taxes on shipping fees — not just products — and it cost him $15,000 in back taxes and penalties.
Hickey is worried the new law would mean audits from California, Texas and elsewhere.
“It’s basically impossible to collect the sales tax correctly for all states. The chance of us collecting all sales tax correctly all the time is zero,” he said. (emphasis added)
All you need is a state auditor on a “Internet sales tax” power trip. Unfortunately that’s all too easy to imagine.
